Which of the Following Is NOT an Example of an IS

question 116

Multiple Choice

Which of the following is NOT an example of an IS shock?
i. a change in interest rates
ii. a change in tax policy
iii. a natural disaster
iv. a change in the price of oil

• A) i
• B) ii
• C) iii
• D) iv
• E) i and iii

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Definitions:

Decreasing Returns

A situation in which the addition of more units of input results in the less-than-proportional increase in output.

High Levels

Refers to quantities or amounts that are considerably above the average or typical range.

Output

The amount of products or services generated by a company, sector, or economic system within a specific timeframe.

Constant Returns

Refers to a situation in production where increasing the inputs by a certain factor results in output increasing by the same factor.